Starbucks gives manufacturing sector a small jolt
Coffee giant creates jobs by ordering mugs made in America
Pottery glaze drips down to Bob Davis’ elbow as he dunks ceramic mugs by hand. He’ll do this more than a thousand times through the day.
He is well aware that someone in China could be doing the same job for less money. However, he is doing the job because the chief of the coffee juggernaut Starbucks launched a private sector initiative to create jobs.
“I guess we took the jobs from China,” Davis said. “They’ve been taking jobs off us all the time, so it’s about time we got back and took a little jobs off of them.”
If you stop by Starbucks for your caffeine fix, you may have noticed the campaign: Create Jobs for USA. The campaign is branded with the word "indivisible" stamped on mugs, wristbands and bags of coffee. For all the obvious reasons, CEO Howard Schultz at Starbucks wanted an American manufacturer to produce the mugs.
American Mug and Stein in East Liverpool, Ohio, fit the narrative.
East Liverpool is a classic tale of American manufacturing. Slogans boast that the town once was the pottery capital of the U.S., and “we set America’s table.” That was until manufacturers learned that all things ceramic could be made cheaper with foreign labor. Now, the word "closed" is seen through the dirty windows of many former factories, as paint peels from the window panes.
So Clyde McClellan at American Mug and Stein was approached by a third-party representative of Starbucks. McClellan had debt that needed to be consolidated before he could think about meeting the demand. But even though he had an order from the king of the latte and a promise for a long term commitment, the traditional banks turned down his request for financing.
The good fortune for McClellan is that the Create Jobs for USA program is coupled with the Opportunity Finance Network, which specializes in giving a double shot to struggling towns.
“They came in, looked at my paperwork and said they could not understand why were not given a loan, but they were certainly willing to help with a debt consolidation loan,” McClellan said.
That’s what it took. Now the kilns are fired up and people scurry about American Mug and Stein carrying loads, carving away imperfections in the clay and preparing an American product to be sold on American store shelves. Pending layoffs were prevented and eight new jobs were created -- without the government getting involved.
The city of East Liverpool could not be happier, though eight new jobs doesn't exactly add up to a rapid economic turnaround. Safety Officer Ryan Estrell says the city won’t even generate enough tax dollars to hire a new police officer. “The huge benefit right now is the national attention it’s getting for the city. It’s a huge morale boost,” he said.
Mark Pinsky with the Opportunity Finance Network says this is about generating momentum and making a statement favoring American labor.
“Most important,” Pinsy said, “what I hope it does is that it gets people to pay attention to the fact that it is possible to lend in these economic conditions.”
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